While casually browsing about the property market, you’ve probably come across the term ‘shared ownership.’ But with so many factors to consider, you may not have entirely wrapped your head around it.

The Help to Buy Shared Ownership scheme is the most affordable option for people struggling to get together a large enough deposit or loan to buy an appropriate property for their family.

And with the scrapping of stamp duty for first-time buyers, it should make home ownership a possibility for far more people.

The barrage of information out there can be daunting – but it really is worth doing your research before assuming you can’t afford to buy a house.

So here’s a simple guide to clarify things for you.

What is shared ownership?

Shared ownership is a government scheme which allows you to buy a share of a property between 25 and 75 percent of the full value. You will pay a subsidised rent on the part of the house you don’t own.

A housing association such as Heylo, Guinness Homes, Sovereign Living or Curo, will own the remaining share of the house. But you retain the right to live in the home and to buy the rest of the property in instalments if you wish to.

The scheme is available on most new-build developments, or some existing properties through resale programmes by housing associations.

Getting on the housing ladder in Bath might be more achievable than you think

Who is eligible for the scheme?

You should be able to buy a shared ownership home if your annual household income is less than £80,000.

You should also be a first-time buyer, or someone who used to own a home but can’t afford one now. Existing shared owners are also eligible to move into other partial ownership properties.

You will need to meet lending criteria but as you are asking for less money this does lower the bar.

Military personnel are given priority and some councils or housing associations may have their own priority groups or additional criteria.

What are the benefits of shared ownership?

The most obvious benefit of only buying part of a house is a smaller deposit is required – you can pay just five percent of the share you’re buying. It is also great if your circumstances make it hard for you to qualify for a larger loan.

Shared ownership may allow you to buy a home in your chosen area that you otherwise would not have been able to afford. As the provision of a certain number of shared ownership homes is often required as a part of planning permission for a new development, you can find affordable housing in the heart of some prestigious postcodes.

Don’t be put off by the ‘shared’ descriptor – unlike a shared rental, you don’t actually have to live with anyone else.

Video Loading

Video Unavailable

Click to playTap to play

The video will start in 8Cancel

Play now

What’s the catch?

Like any accommodation option, shared ownership has some cons to consider.

As a partial owner, the combination of your mortgage and rental costs are often lower than renting through the private market. However this still means money ‘wasted’ on rent compared to full ownership.

Shared ownership properties are leasehold so can also be subject to maintenance charges. You are generally banned from subletting your property. There may be additional limitations as leasehold terms can vary.

Home buyers considering this option still need to be sure they can afford their mortgage, rent and any other associated costs.

Just like falling behind on your mortgage repayments can place your home at risk of repossession, going into arrears on rent on a shared ownership property could place you in a tricky legal position.

When it comes to selling the property there may be delays as the housing provider will first want to try to find buyer who qualifies for shared ownership.

How can I find a shared ownership opportunity?

If you contact the sales office of a new development they will be able to tell you which of their properties are available for shared ownership.